GAO Walks the Line on Whether Facility Clearance is Proposal Acceptability or Responsibility Matter

Your small business is interested in submitting a proposal that requires a Department of Defense Facilities Clearance (FCL). While you will not have the required FCL when proposals are due, you have applied for the FCL and all signs indicate you will have the FCL by the time contract performance begins. In this scenario, can the agency outright deny your proposal or would it have to refer your proposal to the SBA for a certificate of competency?

Turns out, it all hinges on whether GAO views the FCL requirement as a matter of proposal acceptability or corporate responsibility.

This fact pattern comes straight from ProTech Services USA, LLC, B-417484 (July 19, 2019). ProTech, an SDVOSB, was eliminated from competition because it failed to provide evidence of an FCL. “Protech is a four-member joint venture [and] each member company holds a facility clearance, but the joint venture itself does not.” The RFP called for processing of mail classified at the secret level and “required offerors to provide evidence of facility clearance.”

Each proposal had to show that the prime offeror had “(1) at least a SECRET final facility clearance level, or (2) at least an interim SECRET facility clearance, or (3) an existing facility clearance sponsorship letter and documentation that reasonably demonstrates that the process is in the final stages and likely to be completed no later than January 31, 2019, and have received an interim clearance to demonstrate that the facility clearance is in the final stages of obtaining one[.]” Proposals that did not satisfy one of these criteria would be ineligible for award.

ProTech fell into the third category, and noted in its proposal that it anticipated to receive its FCL no later than January 31, 2019. However, Protech never produced proof of the joint venture’s FCL, even after DHS requested it. Instead, Protech “provided the agency with copies of the facility clearances for each of the four members of the ProTech joint venture.” Because “[a]n existing facility clearance sponsorship letter was not included with the proposal, and ProTech did not submit any proof that a clearance had been received by January 31, 2019” ProTech’s offer was found ineligible for award.

ProTech protested the decision, arguing that the FCL issue was a question of responsibility that SBA should determine under a COC. DHS responded that the FCL provision was “a material solicitation requirement” and failure to document an existing or interim FCL was a “matter of proposal acceptability.”

Interestingly, GAO admitted that “the ability to obtain a security clearance is generally a matter of responsibility[.]” So what was different here?

Turns out that an exception to this treating a security clearance as a responsibility matter exists when there is “an express requirement in the solicitation to demonstrate the [FCL] prior to award.” This express requirement makes the FCL a “material solicitation requirement.”

In this case, the RFP required offerors to provide evidence an active or interim FCL as part of a proposal. The RFP also stated that failure to provide proof of an active or interim FCL by January 31, 2019 “would render an offeror ‘ineligible for award.’” Because of these provisions, GAO found the FCL requirements were “a material solicitation requirement and not a matter of responsibility.”

In the end, GAO denied ProTech’s protest because ProTech failed to satisfy a material solicitation requirement when it did not provide evidence of an active or interim FCL.

The ProTech decision is an important reminder that nuanced language in a solicitation can greatly affect an offeror’s ability to compete. The solicitation language regarding the timing and necessity for an FCL clearance was the difference between winning and losing this award.

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